We are in unprecedented times. The world is in shock and awe as this terrible virus swirls around the globe with the President of the United States declaring a national emergency, unlocking billions of dollars to prevent America from falling into desperate times.
For every person in America, there is immediate concern and stress that has come over each one of us almost over night. Where did this come from and why can’t I get my normal life back?
Each one of us has a different set of concerns. How do I prevent from getting sick? Should I just sit at home and cut myself off from society? What just happened to my 401k plan and now what? Will I have a job tomorrow? What should I be doing now to protect my financial future?
These are unprecedented times and they don’t come with detailed instructions. So what am I to do? We wanted to attempt to calm everyone’s nerves here and provide some tips on what to do financially given this sudden outbreak and global pandemic that has completely uprooted our lives as we know it.
I know this sounds easy to say, but it could not be more true and is exactly what you need to not do right now. Don’t Panic. The worst financial decisions are made in fear.
Keep in mind that the sun will continue to come up tomorrow and this virus, just like many in the past, will pass us in time.
If you look back into time. For example, let’s take the financial crisis of 2008 or let’s say even the attacks of 911. In the moment of despair and panic, those who became the most fearful and sold their portfolio at the bottom, never recovered their financial position for their future.
Unless you have a crystal ball, which I know none of you do, then we should be thinking long term at all times and adjusting our portfolios based on the risk tolerance as we get older.
This is not the time to be adjusting your portfolio, so just let your investments ride at this point. In 6 to 12 months from now, this virus will have been long forgotten and the damages done to the United States economy will be on the mend.
Don’t panic and start selling and adjusting assets in this turmoil. I assure you, it’s a high probability you will make the wrong decision in fear.
If you have extra cash, you may consider targeting some investments to buy into that are way undervalued given the latest news. If you are able to sit on those investments for a period of time, you are highly likely to come out on top once this all passes.
Stash Some Cash
This is also not the time to be going out and buying non essential items, unless you just have more money than Elvis.
This is also not the time to have started an emergency fund. If you haven’t started an emergency fund, I would make it a priority now even if you can set aside a little bit of money to offset the short term risk that is presented in the world.
Financial experts will tell you that you should have 3-6 months money set aside for your normal living expenses in an emergency fund to ensure you have the funds available when something like this happens. At a bare minimum, give yourself a month run way with an emergency fund.
If you have zero funds in an emergency fund, no problem. You can start today!
Here are some suggestions on saving money that we have blogged about in the past:
- 10 Ways To Cut Expenses And Budget
- 101 Things To Do Instead Of Spending Money
- 8 Steps To Get Out Of Debt
- 20 Ways to Save Money in your Twenties
- Other Drew’s Money Budget Tips
Make Extra Cash
Even though the economy is taking a hit, that does not mean there are not ways to make a little extra cash in the short term.
Whether you pick up delivering some pizzas on the weekend or join the gig economy with the Uber’s and Doordash’s of the world, there are many gigs that you can get started on today that pays real cash in the short term and none of them requires a college degree.
The point here is that you don’t need to feel down and out, if you know of the many options that you can get started on that can earn you some extra cash in the short term.
Here are some ideas that you can move on today to earn some extra cash:
- 12 Passive Income Ideas To Make Money While You Sleep
- Teach English And Make $20 An Hour At Home In Your Pajamas
- 44 Web Sites That Pay Up To $500 Per Photo
- Turo – Make Money By Renting Out Your Car
- 10 Best Ways To Make Extra Money
- House Sitting Gigs – Get Paid and Stay for Free around the World
- How To Make Extra Money As A Virtual Assistant
- 12 Extra Income Ideas for Introverts
- Make $12 – $15 An Hour In Your Pajamas Evaluating Search Engines
- My Epic List of 100+ Top Ways to Earn Extra Money
- How I Make Money Mystery Shopping
- 13 Online Survey Sites that will Pay You Extra Money
Create An Emergency Budget
As we go about our lives, we tend to forgot about keeping a budget and keeping our spending in order. When you don’t have a goal to hit when it comes to a budget, you are more likely to overspend.
First things first, You should inspect your spending at this time. Go back over the last month or two months and look at what you spent. Inspect each item and evaluate is this a one time spend or does it regularly occur.
For the one time expenses, you can just leave those in the past. For the expenses that you think will keep occurring going into the future, I would take those and plug them into our budget spreadsheet. This will allow you to see on one sheet of paper what you are spending monthly and see how it aligns with your income.
Then go through each one that you have listed on the budget spreadsheet and ask yourself if it’s a needed expense right now. Do you absolutely need that Netflix subscription? Is there any opportunity to reduce that cable bill that you just can’t live without. Maybe there is an alternative solution that could save you money?
This is a time to really critique your spend and see if there are opportunities to either reduce the spend or eliminate specific spend until you can build up the fully stocked emergency fund.
Here are some further tips:
- 10 Ways To Cut Expenses And Budget
- Here’s my 26 Week Challenge to Save $1001 in Cash
- Here is my $20 Challenge to Save Money
- Don’t Budget Your Money, “Bucket” Your Money
- Sign Up For Drew’s Free Budget Worksheet
Don’t Look At Your 401k
If you had a crystal ball, which you don’t, you would have liquidated your 401k into cash at the onset of this pandemic. Most people did not do this, because who knew it was going to have this kind of effect on the economy.
Now that the damage is done to the economy, selling at what could be the bottom may not pan out for you financially. The best advice at this point, is to stay the course.
The one thing you must remember is, this is absolutely a short term problem and the markets will recover in time. When, no one knows, but I assure you the markets will recover and putting your investment on hold right now may not allow you to benefit in the recovery when it does happen.
That recovery in the market could happen at any time and it will happen. So be a part of it and keep your “long term” investments in motion so you can ride the tidal wave back up to the top.
Sign Up For Money Saving Apps
There are many digital ways that you can positively stack your financial outlook. Whether you are trying to save some money when you go out and buy something you would buy anyways, or if you are trying to come up with creative ways to invest for your future, there are numerous apps out there to help you along the way.
Here are a few blog posts that we have written on the topic:
- How I Get Free Gift Cards Every Month
- 8 Must Have Apps That Pay YOU To Shop
- How I Made Over $3,000 From My Extra Change
Level Up And Learn Something New
Given that most Americans are stuck in their house, this makes this a perfect time to learn a new skillset that could drive more value to your career.
I am not suggesting that you sign up for college or take that latest and greatest boot camp where you pay lots of money to attend.
There are tons of resources available to you via the internet that you can use at a very low cost or free.
For example, pick any topic and go out to YouTube. Whether you want to learn more skills as a mechanic, pick up the latest in IT technical knowledge, a new project management methodology, time management, new leadership skills or learn some more about the latest in healthcare as a nurse. The internet is rich is knowledge.
So pick a topic and go out there and learn something new that can help you pay dividends on where you want to go in your career.
In these underrepresented times, stress may creep up on you more than usual. It is important more than ever to manage your stress levels. People tend to make bad decisions when stress levels are high, so its important you keep that stress in check.
Make sure you are getting enough sleep. Make sure you are eating healthy and taking care of yourself. Consider working in regular exercise even if that means taking a walk around the block and consider the healing power of meditation. There is something to be said about just putting yourself in a comfortable spot in a quiet room and spending 10 minutes meditating.
Pay Down Debt
This may or may not be time to pay down your debt, you need to make that risk decision for youself.
Ultimately, it’s costing you money and risk to have debt on your hands. If you have debt, specifically if it is significant, you need to make it your goal to get out of debt completely because it is ultimately holding you back in life.
Here are some of my posts around getting out of debt:
- 8 Steps To Get Out Of Debt
- Drew’s Ultimate Credit Card Guide – Lower Interest Rates
- 10 Reasons Why You’re Broke and Have No Money
- 5 Myths about Money Debunked
When you are unhealthy or ill, you go see a doctor, right? When you want to become more physically fit, you go to a gym and see a fitness trainer, right? Getting to financial freedom and stability works the same way, go ask for help!
You can start with the financial institution that you already use to see what services they make available to you for free. There are also plenty of non profit organizations that have popped up to help you from a credit counseling perspective. Just make sure that you trust the people that you are talking to, where they are acting in your best interest.
At the end of the day, you always have your friends and family to lean on to support you. Those are the people in your life that want to see you happy and successful, so don’t feel ashamed to reach out to those who love you the most. They will always be there.
Don’t give up! This to will pass and we can get on to bigger and better things well into the future!
If you feel like life is just too much for you to handle, don’t give up on it, there is help for you. The future is really bright for you, even if today there are dark and stormy clouds hovering.
- National Suicide Prevention Lifeline 1-800-273-8255
Be nice and take care of each other!